Hospital reforms have changed transfer behaviour

People with more complicated health
conditions are being transferred from smaller regional
hospitals to the larger tertiary hospitals less often since
the health reforms of 2003, according to research from
Massey University’s School of Economics & Finance.

The
research also finds tertiary and teaching hospitals are
under-funded for their level of expertise and workload.

Dr
Somi Shin’s doctoral research examines the impact of the
health system reforms of 2003.

One aspect of her work
looked at data around the transferral of patients between
hospitals.

Dr Shin found that where smaller hospitals once
routinely transferred the most complex cases to specialists
at tertiary hospitals, since the system reforms that
introduced the population-based funding formula smaller
hospitals were more likely to keep their complex
cases.

“What this means is that sicker patients are less
likely to be transferred since the health system reform in
2003,” says Dr Shin.

“We think that is because the new
system gives non-tertiary district health boards incentives
to keep patients in their districts to retain the funds. If
you transfer patients, you have to pay the other provider
for the treatment from the funds you received.”

The
research also found, however, that even though more complex
cases were less likely to be transferred, the more fatal
cases – that is, those people with higher mortality rates
- were still transferred to the tertiary hospitals – “so
non-tertiary district health boards seem to selectively
treat severe but non-fatal cases”.

Another aspect of Dr
Shin’s research was analysing data around the
population-based funding formula, which provides lump sums
to hospitals based on their population mix.

She found that
the larger hospitals were being under-funded – not because
fewer complex cases were being sent to them – but because
the population-based funding formula does not directly
reimburse providers for the complexity or volume of cases
they receive.

She found that some ethnic groups, such as
Māori and Pacific people, used the health system in excess
of their population share.

Population-based funding means
some district health boards may find a disproportionate
amount of their funding goes towards a smaller group within
the population mix who use services more intensively. This
means that in those cases, those hospitals were effectively
under-funded.

Dr Shin’s supervisor, Innovation and
Economics professor Christoph Schumacher, said Dr Shin’s
was the first piece of research which showed larger
hospitals are under-funded.

“By looking at a very large
data set, there is sufficient evidence to show they do get
penalised.”

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